IMF cuts Seychelles 2014 economic growth to 2.8 percent

Sat Dec 13, 2014 6:32am GMT
VICTORIA Dec 13 (Reuters) - The International Monetary Fund said Seychelles' economy will grow at 2.8 percent this year, lower than its initial forecast of 3.7 percent, due to weaker demand for the country's main exports.
The Indian Ocean archipelago relies on exports of canned tuna and its tourism business for hard currency earnings.
A surge in imports, driven by better incomes and access to credit, had put further pressure on the exchange rate, which weakened 11 percent between August and October this year, the IMF said in a statement seen by Reuters on Saturday.
It said the central bank's decision to tighten the reserve money target for the fourth quarter will dampen the inflationary effects of the currency's depreciation.
The IMF approved the disbursement of $2.4 million to Seychelles, part of a an extended credit facility in June this year, it said in the statement.
(Writing by Duncan Miriri; Editing by Simon Cameron-Moore)

Reuters Africa

IMF Completes First Review Under Extended Fund Facility Arrangement for Seychelles, and Approves US$2.4 Million Disbursement

WASHINGTON, 12 December 2014 / PRN Africa / — The Executive Board of the International Monetary Fund (IMF) today completed the first review under the Extended Fund Facility arrangement (EFF) for Seychelles. The completion of the review enables a disbursement of SDR 1.635 million (about US$2.4 million), bringing total disbursements under the arrangement to SDR 3.27 million (about US$4.8 million). The Executive Board's decision was taken without a meeting. The EFF was approved in June 2014 (see Press Release No. 14/262) for SDR 11.445 million (about US$ 16.8 million, or 105 percent of Seychelles' quota), and follows the expiration of the previous EFF in December 2013.
Program implementation and economic fundamentals continue to be strong, although the external position weakened in mid-2014. At the first test date of end-June 2014, all performance criteria were met; based on preliminary data, all third quarter indicative targets were also achieved. The structural agenda remains broadly on track, although there were some technical delays, notably with respect to amending tax legislation to make it consistent with international transparency norms. Projected growth for 2014 has been revised down to 2.8 percent from 3.7 percent, due to weaker demand for Seychelles' two main exports—tourism and canned tuna. At the same time, strong growth in personal earnings and private sector credit have fueled a surge in imports, putting further pressure on the balance of payments. As a result, the exchange rate depreciated by 11 percent in nominal effective terms from early August to late-October.
The authorities have taken appropriate monetary and fiscal policy actions to address balance of payment pressures. The Central Bank's decision to tighten the reserve money target for the fourth quarter of 2014 by 7 percent and maintain this stance into 2015 is a strong response to the demand and external pressures, which will serve to dampen any inflationary second-round effects following the depreciation. The fiscal targets for 2014 and 2015 were also tightened to support the restoration of external balance and maintain progress toward the target of reducing the debt-to-GDP ratio below 50 percent by 2018. The flexible exchange rate regime continues to serve the country well, and can act as an important safety valve in helping to manage the pressures and restore external equilibrium. Steadfast implementation of the authorities' structural agenda should continue to lay the groundwork to promote inclusive growth and reduce risks. This agenda focuses on ensuring transparency and efficiency in the use of public resources, strengthening the governance of state-owned enterprises, and enhancing the environment for private sector development.

SOURCE International Monetary Fund (IMF)







  1. It seems the monitary and fiscal policies forced on government would be infinitive.Since 2008 ,when IMF frist started bailing Pl banrupcy ,all kinds of tactics,polcies have been implememnted none so far has worked effectively in order that it has a real eefect of our economical problem.In fact as Ex IMF _Nobel Pirze in Economic Mr Joseph Siglitz, former economist at World Bank --Imf the "Conditionality of Imf is not effective an a one side policy.

    It seems each times Imf came it comes to exrent the its laond distributions- now Imf tells w reduction will come in 2018,In 2018 it will probably tell us in 2030---for life .

    1. Jamaica has been under the IMF for decades.Over 40 years, Jamaica has been "rescued" on countless occasions. In the 1980s, the island became almost a byword for "structural adjustment". Jamaica is one of the most indebted countries, spends twice as much on debt repayments as it does on education and health combined, and looks set to miss several millennium development goals . After four decades of austerity, the country has a few lessons for the likes of Greece, Portugal and Ireland.

      The IMF "rescue" is a rescue for Jamaica's creditors. It spells more suffering for its people. As Europe enters a fourth year of debt and austerity, Jamaica enters a fourth decade. The island's debt needs to be written off, to open up the possibility for a better future and allow the people to take control of their economy.

  2. ,Under a fixed exchange rate---for instance,a small country faced with perfect Capital mobilityand with no nontrade goods,will find fiscal policies effective in nfluencing aggragate demand,while monetary policy remain entirely ineffective.Fiscal policy is effective in influencing aggragarte demand,since change in the fiscal stance does not affect the interst rate.(which will always reamin equal to Intenrational exchange rate or the exchange vrate which is fixed by a policy decision.Of course there are limited under a fixed exchange rate---for example by the ekening of confidence of exchangev rate peg, that could follow an expansioary fiscal policy.such policy that lead to the current account of balnce etc...

  3. Imf as well as WB can be called the scheme of debt slavery.It create a vicious circle, loans are always needed to service the new ones.
    Moreover,Both imf and Wb makes government accountable to imf not the people.

    Alternatives to count and get rid of this world dictators and one_way style trade deals ,would be :Market~based policies.That is pursuing domestic policies and international investors would be more likely follow basic principles of sound banking.Lenders would charge foreign exchange rates,that reflect true credit risks,and reauire proper collateral ,prudent i.vestment and sound domestic economic policies,or conditions for cross_boarder loans.Lender,would also enhance their own internal risk management sytems.
    This entails socially redistributing national resources,develop local economies and sweeping reform to social Equity.etc. .

  4. 30 countries have been and still depending on imf loans after 32 years,29 for the last past ten years and nothing shows that they about the rehab from imf loan addiction.imf loans have become their hrad addictive drug that seems to have no cure from them.If pl does not rehab itsekf and stop using abusively imf loans it s addiction. Would end up being uncurable.

  5. Imf loans couple with WB ,is a recipe to ruin.Borrowing more and always more to meet previouS debt obligations.
    Under Imf preesure ,pl burden businesses which increase hardship.
    Politically,as a result of reckless borrowing,pl has little need to be accountable to its people,this lending insulates government and make us dependent on forign institutions etc...
    We are simply asking for a cancelationof these debts,as world leaders such as Cameron is calling for,but also a debt audit,it would seychells peoplw charge on their economY

  6. IMF managemnts would like recipient countires to OWN the policies of conditionalities much more than they have done.But genuine ownership can only be derived if the countires themselves participate in the making of policies.;and this is generally not the case for IMF polcies is a dictation,imposed unilaterally by IMF,often aginst the wishes of governments and people.Sitll the polcies would be sccepted if the work,but they have not worked.Instead of recovery,growth and getting out of debts,many recipient countires Like Jaimica and others have experienced stagnation,increase porverty,industr collopased and the Imf loans alawys come with austerity, and many still trapped in debt.
    There are countires like Iceland,Agentina and tohers that implement their own alternative polcies than that imposed by dictation by Imf and have become examples to follow for any countries trapped in IMF spider web and depedency.

  7. Pl is celebrating its entry in WORLD BANK as victory with positive consequences on our people lives and economy.The fact,supported by many states who signed to World Bank dictations show the contrary.In fact Both Imf And World bank act as world dicators and their polcies hfor instance,in Africa have created dependency ,lost of control of national economy by natives,wild openness of a country economy to foreigners,reduce sovereignty for WB as Imf forced governemnts to be accoutanble to them.World bank is the main causes ofincrease poverty in Africa and else where.Most human rghits activitists world wide recognize the fact that Imf andWorld bank to the contrary of the poclieis they officially offer have created more hardship to borrowing countries.Their neo-liberal polcies is solely conccnetrated on expanding import from borrowing countires which create price dump cheap product from outside and inequality in trade.

    Seychelles should have not been part of World Bank but find alterantives polcies to avoid World bank dictatoion and austerity poclies that doe not help a country out of economic hardship but instead keep it in it,while foreigners would come to control a nations economy which also automatically means having political influences on decisions -of y countrys polcies.Seychelles is soveiregn and we cannot allow two dictatorial insitutions come and over-rule our people wished,aspirations and act like super international governemnts above that of soveiregn countries.We cannot as soveiregn country allow ourselves and polcies to be dictated by a group of f world inancial thieves.

  8. Seychelles chief economist Dr Laporte praise,applauded, seychelles membership in world bank.Dr laporte apparetly believe WB policies provides the panacea to solve the economic mess he and pl created without has run out control.
    Prominent well known economists like Mr joseph stiglitz who has been profesor at several prominent universities,who was also US treasury secretary,and later Chief economist at the WB,also anobel prize winner ang Mr Paul Krugman a prominent economist and nobel prize winner have activily and publicly criticizing both inf and WB policies for the last past years.
    I would be glad if our chief economist Dr Laporte tells us why he think he is wiser than the two economists noble prize winners and what makes him believe laporte knows best?

  9. Custom duty reduction for foreign imported good,benefit the foreign rxporzers ,that sell its products at cheaper price ,he does pay taxes locally,etc which helps destroy local farmers, local productions, bad for local economy.
    Open a chicken farm on an outter island,pl chicken is a high value products that could be produced locally ,therby creating a lucrative business that could.boost government revenue,instead of importing ckicks from would also allows local farmers diversify their products.
    What heliculture. That is snail farming,not a priduct for local use,but it has a real lucrative market in asia,europe,US,eg US imported for a total of Us 10 million dollar i. 2010,forl 24 countries,and still Producers can not keep supply enough in regards to increasing is a green economy,blue ,green economies,all is about sustainabilty,pl.
    Off shore red snaper,grouper acqua farming
    Mud crab farming
    sole fish farming,fishing,an expensive fish on european market
    Wake up pl!

  10. Seychelles economy weaker because of weaker export especially tourisn,and without dealing with the problem of bad air co.nectivity zhings would stay the same next year.

  11. SNP will be organizing a protest by car owners on taxes,Ram taxes affect all seychellois ,call all seychellois on the street dog.respect at least,for being able to organized a protest,Gill can not even organised a press conference for two.persons,he could maybe join u on 23rd

  12. Seychellois are suffering by low imcome ,high taxes and Ram tells us he will organized a protest for car owners?First RAWm donkey,unite Oppostion,meet NGOS,Business communities then together organized the only protest ,that is a massive one that will end when partilpep give back power,else the portest would never stop until pl thieves and donkeys give up themselves to the custody of the people and find ther rightpalce at Montagne Possee for live.Who reisit the prison cells ,should be executed on the spot.No negocciation,no forgivennss,no pardon these their time are over.

  13. Humpty -Dumpty Gill ,the self- name Prince of Praslin.Michel is King of Seychelles ;he is Prince of Praslin,Glenny Prince of our Outter Island,Gregoire Prince of La Digue,each one has received their titles and position from Pl.Mancham is Gneral Secretary of Ambassadors,Paul Chow principle Secretary of Off shore banking,money launderying,etc..etc..

  14. What he is prince,he is now part of the pl dynasty,member of the royal family,as duke tonton lord mancham.

  15. Give back ur fat cat pension for life Ram,which reduce government wastage.IT IS strange father ram zodate,unlike bishop french has not been awarded anything,not even for pl.he is fake,that is why.u donot give donkey award,but some good slashes of lashes.


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